CFO Lending overcharged customers and took money from their bank accounts without permission
A payday loan company has been ordered to repay £34 million to borrowers after regulators found evidence of unfair practices.
CFO Lending overcharged customers, took money from their bank accounts without permission and sent threatening letters over missed payments.
The firm’s failings were described as “unfair behaviour” by regulator the Financial Conduct Authority (FCA), which banned CFO from making any new loans earlier this year.
It has now been ordered to write of £31.9m of debts and give out refunds totalling an additional £2.9m.
The regulations on payday loans are making a difference and the amount of people we see with payday loans has been falling, but there is more work to do
The move has been welcomed by charities.
Mike O’Connor, chief executive of StepChange, said: “This case highlights the importance of a strong regulator prepared to step in and take decisive action against firms that break the rules.
“We need a powerful FCA to defend consumer interests and look out for vulnerable consumers and it is good to see this in action.
“The regulations on payday loans are making a difference and the amount of people we see with payday loans has been falling, but there is more work to do across all forms of consumer credit to ensure that everyone is protected from the damage that poor practice and harmful products can cause.”
Citizens Advice Scotland policy manager Keith Dryburgh also commended the FCA for taking action.
He said: “Payday lenders should not be allowed to take advantage of consumers in these ways. We have always called for robust regulation of the lending industry, and this shows that it does work.
"We would urge consumers to report any lender which is falling short of its responsibilities to trade fairly. This case shows that they can be confident that their concerns will be properly heard and that any wrongdoing will be acted upon."
In a statement on its website, CFO said: “CFO Lending Ltd agreed with the Financial Conduct Authority (FCA) that it would provide redress to customers who were affected by past unfair practices. As a consequence affected customers would either have the amount they owe to CFO Lending Ltd reduced or written off.”
